Growth in AUM Likely to Support BlackRock's Q3 Earnings

Core Insights - BlackRock (BLK) is expected to report improved third-quarter 2025 results on October 14, with revenues and earnings anticipated to rise year over year [1][8] - The company has a strong earnings surprise history, surpassing the Zacks Consensus Estimate in the last four quarters with an average surprise of 9.65% [2] AUM Growth - BlackRock remains a leading player in the ETF market, with consistent AUM growth supported by diversified offerings and strong revenue mix [3] - The approval of spot Bitcoin and ether ETFs, along with acquisitions of ElmTree and HPS Investment Partners, are expected to further boost AUM [4] - The Zacks Consensus Estimate for total AUM in Q3 is $13.08 trillion, reflecting a 13.9% year-over-year increase, while the internal estimate is $12.59 trillion [4] Revenue Expectations - Revenue growth is anticipated in investment advisory, administration fees, and securities-lending revenues, with a consensus estimate of $4.92 billion, indicating a 22.1% year-over-year rise [5] - The consensus estimate for investment advisory performance fees is $359 million, showing a decline of 7.5%, while distribution fees are expected to rise by 7.4% to $347 million [6] - Technology services revenues are projected to reach $497 million, reflecting a 23.3% year-over-year increase [6] - Advisory and other revenues are estimated at $58 million, indicating a 9.4% rise [7] Expense Overview - Total expenses are expected to increase to $3.66 billion, representing a 14.8% year-over-year rise due to restructuring initiatives and inorganic expansion efforts [9] Recent Developments - The acquisition of HPS Investment Partners on July 1 is expected to enhance BlackRock's private credit capabilities and grow fee-based revenues [10] - The acquisition of ElmTree Funds on September 2 aligns with BlackRock's long-term goal to raise $400 billion for private markets by 2030 [11] Earnings Predictions - The Earnings ESP for BlackRock is -0.51%, indicating a low chance of beating the Zacks Consensus Estimate for earnings this quarter [12] - The Zacks Consensus Estimate for Q3 earnings is $11.53 per share, revised 1.8% lower over the past week, with a projected sales estimate of $6.27 billion, reflecting a 20.7% year-over-year rise [13]